Earnings Call Transcript - WAVE Q4 2021

Operator, Operator

You have joined the meeting as an attendee and will be muted throughout the meeting. On the Eco Wave Power's fourth-quarter and full-year 2021 earnings webinar. All participants here today are in a listen-only mode and we are recording today. So that is your notification of that. I am Rob Bank, and we are proud to support Eco Wave Power and its efforts, Investor Relations efforts. Hosting today's webinar, Inna Braveman, Eco Wave's Co-Founder and Chief Executive Officer. Before I turn the webinar over to Inna, I'd like to remind everyone that matters discussed on this conference call will constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company's plans, objectives, and expectations for future operations and are based on management's current estimates and projections, future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such uncertainties, please see the risk factors section as described in Eco Wave Power's registration statements on Form F1 filed with the SEC, which is available on the SEC's website at sec.com. With that, I will now turn the call over to Inna. Inna, congratulations on a successful, productive year. The call is yours.

Inna Braverman, CEO

Thank you, Rob. So I'm excited to conduct this webcast and we worked to extend our efforts to connect to the shareholders and to impact investors globally. I'm glad to be here today and announce that we're considerably closer to achieving our mission of changing the world, one wave at a time. I'm particularly proud of our team for advancing these important initiatives despite the pandemic, which created a whole new set of challenges. We believe that the world needs our technology and that there is growing recognition of the importance of wave energy. During the year 2021, we kept pushing towards achieving our goal. This was evident by our significant progress with our soon-to-be grid connected wave energy power station, the EWP EDF One Project in the port of Jaffa in Israel. Currently, we have all floaters manufactured and the installation of the floaters to the seawall has begun. We also finalized the electric groundwork to enable the connection of the power station to the electrical grid. The new wave energy array will be an improved and upgraded version of our existing technology, which will be officially operational with investments from the Israeli Energy Ministry, which officially recognized our technology as pioneering technology. This will be the first time in the history of Israel that electricity from wave energy will officially connect to Israel's national electrical grid. Also, in Israel, we announced that we entered into a collaboration agreement with the procurement administration in the Israeli Ministry of Defense for the Israeli Navy to examine the feasibility of installing the Eco Wave Power technology at Navy bases, which may open new potential market segments for Eco Wave Power. According to the terms of the agreement, Eco Wave Power already procured a wave measuring system and is coordinating with the Navy for the deployment of the systems to collect extended wave data in one to three locations at the Navy bases. While the Navy has secured all premises for the deployment of the wave measuring equipment, the Navy's specialized diving team will install the measurement equipment in the territorial waters of the Navy bases. At the end of the measurement period, Eco Wave Power will share the information collected with the Navy, which in turn will assess the applicability of the technology in line with the prevailing waves in the selected sites. Then Eco Wave Power and the Navy will jointly analyze the results and create energy production forecasts based on such analysis to identify the most suitable application for installation. Provided that the technology is found to be feasible for the proposed locations, the Navy and Eco Wave Power will use their best efforts to work toward the next step of the collaboration, which is the potential deployment of Eco Wave Power technology for the production of cleaner electricity from the wave at the Navy bases. We were also able to move forward with our planned project in Portugal and Ireland, where we have secured the installation and grid connection permit for our blend, one megawatt projects from DGEG and we've begun internal planning procedures to make the projects a reality. The Small-Production Unit registration approval is the first premise required to proceed with the excellent installation and grid connection of the first one megawatt wave energy power station on the ocean side of the Barra do Douro breakwater in Portugal. The one megawatt project is planned to be the first stage of the 20 megawatt Concession Agreement signed with APDL in April 2020 for the potential usage of four locations owned and operated by APDL. Recently we hosted Portugal's ambassador to Israel in a first-ever visit to our new power station in the ports of Jaffa in Israel. Ambassador Jorge Kabral expressed excitement at seeing our next major projects come to reality in his home country. Moreover, in order to accelerate the progress of our Portuguese plant projects, Eco Wave Power appointed Pedro Ernesto Ferreira as head of its Portuguese operations. Pedro brings a wealth of experience from leading advanced energy organizations in Portugal. Presently, he is an asset management specialist at EDP, the electrical company of Portugal. His main responsibilities include supervision, management, and operation of all EDP's hydroelectric power plants in Portugal. He holds a master's degree in electrical computer engineering from the faculty of engineering of the University of Porto and is working towards a PhD on sustainable energy systems. While progressing with our existing projects, we have continued to expand our project pipeline. Today, there are over 325 megawatts of potential projects in our pipeline. The experience that we have gained in our Gibraltar pilot plant, combined with the project that we're undertaking at the port of Jaffa and in Portugal, and coupled with rising energy costs, particularly due to the geopolitical changes in Eastern Europe, are driving increased interest in our renewable practical wave energy solutions. Accordingly, we're adding new potential projects to our pipeline regularly and interest is at an all-time high. One such project is our newly signed collaboration agreement with AltaSea in the port of Los Angeles. According to which, Eco Wave Power plans to implement a pilot project on AltaSea's campus. In Europe, we also continue to expand our already significant project pipeline. We've secured several high-profile grants, including a grant from Innovate UK, which we jointly submitted with the University of Queen Mary of London and a grant that is part of the ILIAD consortium, by the European Green Deal. We also expect to announce some new and exciting Concession Agreements for new projects on the European continent in the near future. At the same time, we are reinforcing our technology in the European market. We're also focusing significant resources on introducing our technology to the U.S. market. Now is the time to introduce our game-changing technology to the U.S., especially following Eco Wave Power's listing on the Nasdaq Capital Market (stock symbol: WAVE). We believe that the U.S. will be one of the most important markets for Eco Wave Power. According to forecasts, wave energy alone has the potential to provide 66% of all the U.S. energy needs. The growing interest and awareness for wave energy in the United States is also emphasized by the new legislative initiatives announced by New Jersey State Assemblyman Robert J. Karabinchak on January 20th during Eco Wave Power's vision-based ringing ceremony on the Nasdaq Capital Markets. Assemblyman Karabinchak presented initiatives to introduce new legislation to include wave energy in New Jersey's energy master plan and to help New Jersey become the first U.S. state or territory to have a commercial wave energy group context. Another positive indicator for Eco Wave Power in the United States is that we were selected as a finalist as part of the coordination with other regional stakeholders in the $1 billion Better Regional Challenge, led by the Los Angeles County Economic Development Corporation. We also formed a partnership with Ocean Power Technologies, a publicly traded marine data and service solutions company. We will work together to utilize our complementary technologies and skills to accelerate wave energy projects. Our collaboration will include several initiatives, including knowledge sharing, joint grant submissions, and assistance in entry to new markets. In addition, we will explore joint solutions, utilizing each company's respective offshore and onshore technologies and taking advantage of OPT's offshore engineering and newly acquired robotic capabilities. In future, Eco Wave Power closes. Given all the progress that I've presented, I believe 2022 will be a year of significant progress as we plan to have important events, such as the official opening of the EWP One project in the port of Jaffa in Israel, significant progress with the one-megawatt project in Portugal, and we will acquire additional projects in the port of Los Angeles. We expect the announcement of new projects, strategic collaborations, and grants in Europe and the United States. Due to the significant workload in 2022, our company decided to focus on specific, high-impact goals to be able to show the largest achievements in the most efficient way. These will be achieved in the following ways. First, we will focus on our most advanced projects. We will accelerate towards the opening of our Israel project, accelerate our planned pilot project with AltaSea in the port of Los Angeles, and commence detailed planning for our first one-megawatt projects in Portugal. We also plan to expand our marketing, sales, business development, and engineering team with experienced professionals in order to achieve more goals faster. Our business development and sales will be focusing more on the European Union and U.S. territories and on strategic partnerships, such as our collaboration with EDF Renewable, the French national electrical company, and the Israel Navy, which we believe at this time brings the highest value for Eco Wave Power. We also plan on leveraging the EWP client's capital position by some medium-term efforts. We have learned to reinforce our revenues and five additional project pipelines by continuing to provide new services such as feasibility studies, we already used it for first revenue in the year 2021. Moreover, as announced on Friday, February 20th, 2020, we plan to also focus on our recent developments. As such, we announced that we plan to apply for the listing in Sweden in three months from the announcement date. When finalizing the decision, we believe Eco Wave Power common shares from Nasdaq will transition to a more liquid market. The board of directors of the company considered the higher liquidity of Eco Wave Power securities on Nasdaq U.S. in comparison to Nasdaq First North, as well as the desire to have all our shares traded on one exchange. I have seen that this news created some potential confusion among our shareholders on Nasdaq Stockholm. I would like to clarify four important items: 1. We still have not submitted the delisting application. It will be submitted to Nasdaq only three months from the date of the announcement, which was Friday, February 25, 2022. 2. Our shareholders can convert their common shares into American depository shares listed on Nasdaq Capital Market at any given time. 3. Our company has reached an agreement with the Bank of New York Mellon, the depository of our American Depository Shares, to enable all shareholders on Nasdaq First North to convert their shares to ADSs free of charge for 90 days from the date of the company's submission of its delisting application to Nasdaq First North. Essentially, we will submit the delisting application only in about 90 days, and after that, you will have an additional 90 days to convert your shares to American Depository Shares free of charge. Moreover, please note that we plan to keep the electronic numbering of the Swedish common shares in full. Meaning, you will be able to keep your Swedish common shares in their current format and you are under no obligation to take any action. Only when you would like to trade the shares will you need to convert them to American Depository Shares. I hope that explanation is clear, and if you have any additional questions, please feel free to contact our company directly, and we would love to provide you with information or assistance as may be necessary. I would like to conclude by saying that when David Leb and I co-founded Eco Wave Power, wave energy was considered an impossible sector. Most of the technologies were operating offshore, which created significant problems. The first problem was the very high cost of the equipment. When you put something offshore, the costs skyrocket due to the unique and diverse cables and moving parts, which does not make it a very rational price point for offshore wave energy systems at the moment. The second problem was low reliability with high-profile failures. In the offshore environment, there were waves of 20 meters and even higher, and unfortunately, no man-made equipment stationed in the offshore could survive the lows of 20-meter wave heights. This led to a lot of breakages and reliability issues. The first problem was also securing insurance, as the ultramodern installations were breaking down regularly, leading insurance companies to be reluctant to insure them. Environmentally, those who are supposed to be the greatest proponents of wave energy objected in part because we created a new presence on the ocean floor, which disturbed the marine environment. There began a big question mark on whether wave energy could even connect to the electrical grid because offshore companies were so preoccupied with trying to lower costs and increase reliability that most did not even get the chance to connect to the electrical grid. With the Gibraltar project that we constructed in 2016, we proved that we can build for much lower costs than our offshore competitors. We proved the reliability of our storm protection mechanisms. When the waves are too high for the system to handle, our floaters automatically rise above the water level and lock into position until the storm passes. Only when the storm passes do the floaters commence operations, similar to a wind turbine that slows down when the wind is too strong for the power station to handle. We also proved that we can secure insurance from reputable insurance companies. We've demonstrated that we can safely connect to the national electrical grid without causing any damage or incurring high costs. Moreover, we are 100% environmentally friendly as we do not connect to the ocean floor; we only connect to resistant, man-made structures such as piers, breakwaters, and other types of structures. This year, we aim to prove it again on an upgraded site at the port of Jaffa in Israel. In 2022, we expect that you will see this project come to full operation along with other tangible progress at our first megawatt scale plant in Portugal. Our next big goal will be to prove that wave energy can produce significant energy amounts and become profitable. Finally, you should expect to see Eco Wave Power advance our operations in the United States and Europe as we pursue these much larger markets. I believe that this will be the year that our goal of changing the world, one wave at a time really takes off. I have never been more excited. Thank you.